Quiz 2 Flashcards
1
Q
Nominal Interest Rate
A
Interest rate when not adjusted for inflation
2
Q
Real Interest Rate
A
Interest rate that is adjusted for inflation
3
Q
Determinants of Asset Demand
A
Wealth, Expected Return, Liquidity, Risk
4
Q
Wealth
A
total resources owned by the individual, including all assets
5
Q
Expected Return
A
Return expected over the next period on one asset relative to alternatives assets
6
Q
Risk
A
The degree of uncertainty associated with the return on one asset relative to alternative assets
7
Q
Liquidity
A
The ease and speed with which an asset can be turned into cash relative to alternative assets
8
Q
What determinants will shift the supply curve for bonds?
A
Profitability, Inflation, Budget Deficit
